23 Sep 2012

Record Keeping II - What kind of records should you keep?

by Darren

Depending on the country you pay your taxes the tax legislation may define specific requirements of the kinds documents you need to keep. You should choose a simple and effective system that clearly shows your income and expenses of your business.

Your type of business you operate can determine the type of records you are required to keep for tax purposes. You should set up your books using an accounting method that clearly shows your income for the tax year. If you operate more than one business, you MUST keep completely separate records for each business.

Some simple and effective Bookkeeping Tips:

Maintain your business records on a daily basis
Identify source of receipts
Record expenses on the date they occur
Keep a complete records of all your assets
Keep them in an systematic well organized fashion

Examples of supporting documents you will need:

Purchases, sales, payroll, cash payments and other transactions will create supporting documents such as invoices and receipts. These documents contain all the information you must record.

It is important you retain these documents because they support the entries in your books and on your tax returns. The length of time you need to retain these depends on the tax laws in the country you operate.

Next entry: Medical Expense
Previous entry: Record Keeping I: a painful job for the small business


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